Gigaproject spending finds a level
29 November 2024
By the end of October 2024, there had been $17bn of contract awards across Saudi Arabia’s five gigaprojects, according to regional projects tracker MEED Projects, up from the $16bn recorded during the same period in 2023.
The five official gigaprojects named by Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud are: Diriyah, Neom, Qiddiya, Roshn and the projects being developed by Red Sea Global.
While the growth in awards on these schemes in 2024 is positive, the pace of activity falls short of the strong growth that was expected as the gigaprojects move into the delivery phase.
The highlights for 2024 have been a $4.7bn contract to build dams at the Trojena mountain resort that was won by Italy’s WeBuild, a $2bn contract won by a joint venture (JV) of local firm Albawani and Qatar’s Urbacon Trading & Contracting for the construction of assets in the Wadi Safar development of the Diriyah project in Riyadh, and a $1bn contract secured by a JV of Spanish firm FCC Construction and local firm Nesma & Partners to build the Prince Mohammed Bin Salman Stadium at the Qiddiya City project on the outskirts of Riyadh.
These awards appear to confirm the consensus in Saudi Arabia that the focus for development is on projects underpinned by events. These are Trojena, which will host the Asian Winter Games in 2029; stadiums for the Asian Cup in 2027 and the Fifa World Cup in 2034; along with Expo 2030 Riyadh and the Asian Games in 2034.
There is also a view that projects in and around Riyadh are being prioritised ahead of schemes in remote areas.
The stabilisation of activity in 2024, rather than the expected growth, combined with the intermittent nature of contract awards, has led to concerns about the prospects for the future of the market.
The concerns peaked when no contract awards were recorded in August on any of the five official gigaprojects, but were abated when there were several high-profile awards in September and October, most notably the Qiddiya stadium deal.
The Line
The most scruntinised project in 2024 has been The Line at Neom.
Since January, there have been reports about how the delivery of The Line will be phased, as well as rephasing exercises for other projects as budgets came under strain. Neom effectively confirmed these reports in November, when it said it is focused on the initial phases of infrastructure and enabling works for the new city.
Neom commented on the next phase of the project when it replaced CEO Nadhmi Al-Nasr with Aiman Al-Mudaifer as acting CEO, saying: “As Neom enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project.”
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